A4A Continues Push to Reduce Tax Burden for U.S. Carriers

Woodrow Bellamy III

Airlines for America (A4A) CEO Nicholas Calio called on the Obama administration to reduce the regulatory and tax burden on U.S. carriers during a speech at the American Bar Association Forum Committee on Air and Space Law Wednesday.

Calio said the government has attempted to triple the security tax imposed on airline tickets over the past two years, and expects to see similar proposals for increases in the upcoming budget.

“The federal tax rate for air travel is higher than it is for alcohol and tobacco, 'sin' products that are taxed to discourage their use. This makes no sense. Our industry drives over $1 trillion in economic activity — 5 percent of GDP — and 10 million jobs. The government ought to be encouraging travel,” Calio said.

An A4A report released last week showed profits per passenger enplaned for U.S. carriers have steadily declined in recent years, down to just 21 cents per passenger in 2012 from $3.18 in 2010.

Calio said U.S. airlines pay 17 separate federal taxes and fees. For example, for every $300 flight ticket, about $61 goes to taxes and fees. He noted that some of the taxes and fees imposed on airlines date back to the 1970s, which he called a “hodge-podge thrown together over the years without any guiding rationale or consideration of their overall impact on demand or affordability.” More